What Is the FRM Exam? A Complete 2026 Guide

The Financial Risk Manager (FRM) exam is a two-part certification from the Global Association of Risk Professionals (GARP). Part I is 100 multiple-choice questions and Part II is 80, each in a 4-hour computer-based sitting, and approximate historical pass-rate estimates are 47% for Part I and 55% for Part II, with no verified reporting period. GARP's fees come to about $1,600 if you register early, and to earn the designation you also need 2 years of full-time experience in financial risk management. The exam covers market, credit, operational, liquidity and treasury, and investment risk, and the credential is widely recognized in bank risk, asset management and regulatory roles.

I know risk professionals at banks and insurers who hold the FRM. Most took it because their employer asked them to, or because they wanted to move from quantitative finance into risk management specifically. The CFA covers investment analysis broadly, and the FRM is focused on risk.

What each part tests

Part I

Part I is 100 multiple-choice questions in 4 hours, and it's the technical foundation: the math, the products and the basic risk frameworks. The topic weights are:

• Foundations of Risk Management (about 20%): ERM frameworks, governance, ethics, and financial disasters as case studies
• Quantitative Analysis (about 20%): probability distributions, regression, hypothesis testing, time series, simulation methods
• Financial Markets and Products (about 30%): futures, forwards, swaps, options, fixed income, mortgage-backed securities
• Valuation and Risk Models (about 30%): VaR, expected shortfall, stress testing, option pricing models, fixed-income risk

If you've passed CFA Level I or have an MBA with a risk focus, Part I will feel familiar. If you're coming from software or operations without much quantitative training, plan extra time for Quantitative Analysis. The Foundations case studies include Long-Term Capital Management, Barings Bank, Metallgesellschaft, the 2008 financial crisis and the LIBOR scandal, which GARP uses to teach risk governance. Learn them as cause and effect, and don't bother memorizing dates.

Part II

Part II is 80 multiple-choice questions in 4 hours. It assumes you've passed Part I and covers how risk is managed in practice:

• Market Risk (about 20%): advanced VaR methods, expected shortfall, backtesting, copulas, extreme value theory
• Credit Risk (about 20%): counterparty credit risk, CVA/DVA/FVA, default modeling, structured products
• Operational Risk (about 20%): Basel-mandated approaches, scenario analysis, cyber risk, model risk
• Liquidity and Treasury Risk (about 15%): funding liquidity, market liquidity, balance sheet management, regulatory liquidity ratios
• Risk Management and Investment Management (about 15%): portfolio risk, risk-adjusted performance, hedge fund risk
• Current Issues (about 10%): a rotating reading list of recent topics that GARP publishes each cycle

Part II is more conceptual and less formula-heavy than Part I, and the questions ask you to apply frameworks to real-world scenarios. Current Issues is unique to the FRM. Recent lists have covered climate risk, AI in risk modeling, cyber resilience, central bank digital currencies and the move away from LIBOR. It's about 10 percent of Part II, and the questions are surface-level if you've read the assigned papers, so don't skip them.

FreeFellow has free question banks for FRM Part I (1,076 questions) and FRM Part II (1,242 questions), covering every GARP topic area.

Logistics, cost and timeline

Both parts are computer-based and taken at PSI test centers, except in mainland China, Hong Kong and Thailand, where GARP schedules through ATA. GARP offers the exams several times a year and publishes the dates on garp.org, and most candidates sit at least once a calendar year. Each question has a single correct answer and there's no penalty for guessing, so answer every one. Four hours of straight testing (with optional bathroom breaks) takes stamina, so do at least 2 or 3 full timed mocks before your sitting.

GARP doesn't publish a numerical passing score. Results come in quartile bands from 1 to 4, with 1 the strongest, and quartiles 1 and 2 have historically been considered passing.

GARP allows only its listed calculators: the TI BA II Plus and BA II Plus Professional, the HP 12C, 12C Platinum and 12C Prestige, and the HP 10B II, 10B II+ and 20B. Practice every numerical question on the one you'll bring. You also need a valid government-issued photo ID whose name matches your GARP registration exactly. Candidates have been turned away over mismatches as small as a hyphen, so check your registration against your ID weeks before exam day.

Here are GARP's fees at the early registration deadline:

Standard registration costs $800 per part instead of $600, which brings the total to $2,000, and study materials, prep courses and practice questions are extra. That puts GARP's fees below the CFA exam fees ($3,520 to $4,570 for three levels) and in the same range as the CPA path ($1,500 to $2,500), but with a paid prep provider you should plan on $2,500 to $4,500 in total. FreeFellow's FRM Part I and FRM Part II question banks cover the full GARP topic set for free, and timed practice exams built from them are part of Fellow.

Plan on about 275 hr of study for Part I and 250 hr for Part II, roughly 10 to 15 weeks each at 18 to 25 hours a week. Taking the parts in consecutive cycles, like Part I in May and Part II in November, makes the total commitment about a year. You can't register for Part II until you've passed Part I, but you can register for both in the same calendar year.

Most candidates leave 4 to 6 months of study between sittings, and I'd go with 6. FRM results take 6 to 8 weeks to come out, so if you schedule Part II for the cycle right after Part I and then fail Part I, you may not find out until the Part II registration deadline for the next cycle has already passed.

GARP gives candidates 2 complimentary practice exams per part, and they're the most representative practice you'll find. Save them for the last 4 to 6 weeks before your sitting and treat them like the real exam. GARP's reading list is published in the FRM study guide each cycle. Some readings are free and others are part of the curriculum.

The experience requirement, careers and FRM vs CFA

Passing both parts isn't enough for the designation on its own. You also have to show 2 years of full-time professional experience in a role substantively related to financial risk management (GARP). Bank risk management (market, credit, operational), portfolio risk at an asset manager, insurance risk and capital, regulatory roles at central banks or regulators, and risk consulting and audit all count. The requirement is broader than most candidates expect, and a lot of audit, regulatory compliance and corporate treasury roles qualify, so check GARP's published criteria before you assume you don't have it. GARP looks at each application individually. The experience can come before the exams, and you have 5 years from passing Part II to submit it.

FRM holders mostly work in three areas. In bank risk, the jobs are market risk analyst, credit risk analyst, model validation, liquidity risk and capital management, in first-line and second-line roles at banks and broker-dealers, and pay typically runs $80,000 to $200,000+ depending on level, region and bank tier. The busiest hiring is in model risk management (validating the quantitative models behind trading, lending and capital decisions) and counterparty credit risk, especially since post-2008 regulatory reform. The curriculum covers both directly through VaR backtesting, model risk frameworks, CVA and Basel rules.

In asset management, FRMs work as portfolio risk analysts and in hedge fund and alternatives risk, measuring portfolio-level risk, running stress tests and overseeing model risk, for $90,000 to $250,000+. Hedge funds value them for derivatives risk and counterparty exposure, and multi-strategy and credit-focused funds tend to hire more FRMs than equity-only managers, where the CFA is more common.

Regulators such as the Federal Reserve, OCC, FDIC and central banks hire FRMs for examination and supervisory work, and the Big Four hire them for risk advisory. Pay there depends heavily on role and region. If you want a regulatory career, the FRM is one of the most directly aligned credentials available, since bank examiners, model-validation specialists and stress-testing teams all work from the same material the FRM tests.

The CFA is for investment analysis, portfolio management, equity and fixed income research, and asset management generally. The FRM is for measuring and managing risk in bank and insurance risk roles and in regulatory and capital management. If you want to pick stocks, build portfolios or value companies, go for the CFA. If you want to measure and manage risk, the FRM applies more directly. FRM vs CFA: Which Credential goes deeper.

You can start with the free FRM Part I practice questions or the free FRM Part II practice questions.